Meralco cuts rates citing lower costs

AFP FILE PHOTO

MANILA, Philippines–The Manila Electric Co. (Meralco) said power rates this month would go down by 41 centavos per kilowatt-hour (kWh) due to lower generation costs.

Meralco said the drop in generation costs was brought on by the decline in forced plant outages and the normalization of Malampaya operations.

As a result, a typical household consuming 200 kWh may expect a decrease of around P82 in its electricity bill, the power distributor said.

Meralco said generation charges for November decreased by P0.245 per kWh amid improved availability of power plants and lower cost of fuel during the supply month of October.

Another factor was that the Malampaya gas facility did not experience any supply restriction, the distributor added.

Last month, generation costs increased because of a cumulative five-day Malampaya restriction (from Sept. 8 to 11 and from Sept. 21 to 23), which reduced the fuel supply to Ilijan and forced the First Gas plants to use more expensive alternative fuel.

With the decline in the incidence of forced outages of power plants, the secondary price cap (a second layer of control meant to prevent price spikes) at the Wholesale Electricity Spot Market (WESM) was not triggered during the October supply month. WESM charges were then reduced to P25.61 per kWh. Charges from independent power producers (IPPs) and power supply agreements (PSAs), meanwhile, were also reduced by 54 centavos per kWh and 3 centavos per kWh, respectively.

In terms of share to Meralco’s total power requirements for the October supply month, WESM, IPPs, and PSAs accounted for 5 percent, 47 percent, and 48 percent, respectively.

The downward adjustment in the bills to households was also partly due to a P0.083 decline in the transmission charge. This was brought on by lower ancillary service charges. Taxes, meanwhile, registered a P0.056 decrease per kWh. There was also a cumulative decrease of P0.026 per kWh in subsidies and the system loss charge.

The power distributor reiterated that it does not earn from the pass-through charges, such as the generation and transmission charges.

Payment for the generation charge goes to the power suppliers such as the plants selling to Meralco through the WESM, and under the PSAs, as well as the IPPs.

Payment for the transmission charge, meanwhile, goes to the National Grid Corp. of the Philippines (NGCP). Of the total bill, only the distribution, supply, and metering charges accrue to Meralco.

Aside from the reduction brought about by the lower rates, customers can further reduce their electricity bill through energy saving tips for this Christmas season, Meralco said.

“For those who are thinking of buying Christmas lights, they may consider buying the LED type. Although relatively more expensive than the conventional Christmas light, the LED type is more efficient in terms of power consumption,” Meralco said in its advisory.